Correlation Between Knafaim and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both Knafaim and Ashot Ashkelon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Knafaim and Ashot Ashkelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knafaim and Ashot Ashkelon Industries, you can compare the effects of market volatilities on Knafaim and Ashot Ashkelon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Knafaim with a short position of Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knafaim and Ashot Ashkelon.
Diversification Opportunities for Knafaim and Ashot Ashkelon
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Knafaim and Ashot is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Knafaim and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries and Knafaim is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Knafaim are associated (or correlated) with Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Knafaim i.e., Knafaim and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between Knafaim and Ashot Ashkelon
Assuming the 90 days trading horizon Knafaim is expected to generate 1.78 times less return on investment than Ashot Ashkelon. But when comparing it to its historical volatility, Knafaim is 1.22 times less risky than Ashot Ashkelon. It trades about 0.08 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 153,681 in Ashot Ashkelon Industries on August 29, 2024 and sell it today you would earn a total of 322,519 from holding Ashot Ashkelon Industries or generate 209.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knafaim vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| Knafaim |
| Ashot Ashkelon Industries |
Knafaim and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knafaim and Ashot Ashkelon
The main advantage of trading using opposite Knafaim and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knafaim position performs unexpectedly, Ashot Ashkelon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.| Knafaim vs. El Al Israel | Knafaim vs. Melisron | Knafaim vs. Global Knafaim Leasing | Knafaim vs. Bezeq Israeli Telecommunication |
| Ashot Ashkelon vs. Bet Shemesh Engines | Ashot Ashkelon vs. Elbit Systems | Ashot Ashkelon vs. Bezeq Israeli Telecommunication | Ashot Ashkelon vs. Rekah Pharmaceutical Industry |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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